- BofA Securities analyst Joshua Dennerlein downgraded Spirit Realty Capital ( NYSE: SRC ) and NETSTREIT ( NYSE: NTST ) to Neutral from Buy on Monday as he takes a more balanced view of net lease REITs heading into 2023.
- "Commentary from the latest earnings calls suggests lighter net acquisition volumes are ahead and investment spreads have narrowed," the analyst wrote in a note to clients.
- For Spirit Realty ( SRC ), BofA's model now reflects smaller net investment activity ($1B in 2023 vs. $1.5B in 2022) next year at lower investment spreads. Dennerlein expects only 0.9% adjusted FFO growth in 2023.
- The same factors come into play with NETSTREIT ( NTST ). Net investment activity is now seen at $430M for 2023 from $482M in 2022, also on lower investment spreads. He expects AFFO growth of 4.6% next year.
- SRC stock slipped 0.5% in Monday afternoon trading and NTST slid 1.3% .
- Compare Spirit Realty ( SRC ) key metrics with NETSTREIT's ( NTST ) here.
- See why SA contributor High Yield Investor prefers SRC's yield over NNN's.
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Spirit Realty Capital, NETSTREIT stocks downgraded to Neutral at BofA